Wednesday, March 30, 2016

(The Big Disrupt) Ad Blocking: a tale of two markets – why ad blockers are winning

There are a number of reasons why ad blockers are going to bleed advertiser and publisher dry but possibly the most important and obvious reason is that publishers and advertisers aren't responsive to their audience, ad blockers are.

Ad blocking exists because publishers and advertisers have ignored the demand among online audiences for years to make better ads or at least make them less intrusive ordifficult to get rid of. Ad blockers, spotting a golden opportunity,have responded to the demand among internet users for an ad less internet and have (with a little help with Apple Inc.) created a growing market that's costing publishers and advertisers billions in lost ad revenue.

The ad blocking market has exploded in a very short space of time with popular ad blocking app Ad Block Plus reaching 200 million users last year and ad blocking showing growth of 41%. With ad blocking growing this fast and showing no sign of stopping, ad blockers have become more assertive.

Ad blocking company Ad Block recently started placing amnestyinternationalads on top of blocked ads and, controversially, ad block plusoffers an "acceptable ads" program which allows advertisers to, at a price, make their ads immune from being blocked. Advertisers have likened acceptable adsto "blackmail" and even racketeering but ad blockers can argue an irrefutable point, they're meeting a demand advertisers have ignored for years.

This trend obviously represents bad news for publishers and advertisers who so far have failed to come up with a coherent strategy to combat ad blocking

Publishers such as Yahoo and Washington Post in response to the explosive growth of ad blocking have gone about alienating their readers by banning those who use ad blocking apps and ad industry body IABhave likened ad blockers to criminals however, despite the bluster offered by publishers and advertisers, publishers and advertisers can only play defense.

Publishers could have easily offered their readers anad free user experience for a fee but their apprehension over readers simply choosing free alternatives and their potential adless subs eating into their paid ad inventoryhas meant that ad blocking have beaten them to the punch.

Advertisers, less exposed than publishers to negative effectsof ad blocking, have spent more time tarringad blockers in the press and making calls forthe quality of ads to improve despite missing the delicious irony thatthey're responsible for the load time destroying and intrusiveads people hate so much .

Advertisers in truth haven't really done much but talk tough because while brands and agencies may lose a large chunk of theirbudgets to blocked ads, advertisers can and will find their target audience elsewhere.

There isn't a brand in the world expecting to recoup their online ad budget as advertising for most brands is at best a way to reach their target audience with an ad about their existing or new products or services or at worst a very expensive brand awareness exercise.

Unlike publishers, advertisers have other options to choose from to reach their audience from native to TV advertising. The real losers in this equation will be publishers whose ad inventory will be depleted by the increasing use of ad blocking apps and will thus see less ad revenue because of it.

In sum, there's no getting rid of ad blockers as they've created a market for an ad free internet popularized by an aloof and slow market between publishers and advertisers who still see ad blockers as the problem.